Bajaj Finserv gets SEBI nod to enter MF biz

Suresh P. Iyengar | | Updated on: Aug 24, 2021

Stock price spurts 8% post announcement

Bajaj Finserv has received market regulator Securities and Exchange Board of India’s approval to enter mutual fund business and will become the 46th fund house to make a foray into the booming asset management business. The company said that it received in-principle approval from SEBI on Monday for sponsoring a mutual fund.

Financial vertical

Accordingly, Bajaj Finserv (BFS) said, it would set up an Asset Management Company and the Trustee Company by itself or through its subsidiary in accordance with applicable SEBI regulations and other applicable laws.

Following the announcement, the share price of the company gained eight per cent to ₹16,475 on Tuesday. In fact, share price of the company has been on an upward march and has gained 18 per cent from ₹13,994 on August 5.

Bajaj Finserv is a financial services company with dedicated focus on lending, asset management, wealth management and insurance. The company registered a 31 per cent fall in its June quarter net profit at ₹831 crore against ₹1,215 crore in the same period last year on a revenue of ₹13,949 crore which in itself is down two per cent compared to ₹14,192 crore logged in the same period last year.

Holdco for Bajaj group biz

Bajaj Finserv is the holding company of various financial services businesses of the Bajaj Group. It provides asset acquisition through financing, asset protection through general insurance, family protection and income protection in the form of life and health insurance and retirement and savings solutions.

BFS participates in the financing business through its 53 per cent holding in Bajaj Finance and in the protection business through 74 per cent holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company Limited. Its wholly owned subsidiaries – Bajaj Housing Finance and Bajaj Financial Securities – are into mortgage and broking businesses.

Making a beeline

In May, the market regulator had cleared Samco Securities’ application for entering the mutual fund business. In last one year, many financial services companies including Trust Group, NJ AMC and Sachin Bansal-backed Navi Technologies have entered mutual fund business. Payment and financial service providers Paytm and PhonePe are also looking to enter asset management business and launch their mutual funds products.

In a bid to widen the market reach, SEBI last December paved the way for technology start-ups to enter the mutual fund business by waiving the profitability requirement to enter the business.

Published on August 24, 2021
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